These four areas seem to have commonalities but rather limited. If you start digging under the surface, however, you’ll soon understand that they all strive for the same ultimate goal: enabling customers to be more successful. Understanding what it means to be successful is important to succeed in these four areas.
Customer success is at the core of a product
As a user, I’ve often used suboptimal products or been provided with suboptimal services. And you
most certainly have too.
When I purchase a product or service, I’m usually not interested in the product per se. It is the
product’s benefits that I’m looking for. Whether real or perceived, benefits are the only thing that
create value for me. These benefits may be helping me look good, for instance, or providing me with
energy in the morning. They could be transporting me around, allowing me to train for my next trail
race, or showing off to my friends… These product benefits help me be more successful at what I’m
doing. So in order to really please me when I buy from you, you’ll need to understand what I’m
trying to achieve and what it means to me to be successful. You might be trying to sell me a pair of
excellent jogging shoes, but if you don’t know that I’m running on trails, I won’t be as successful as I
could be — and I’ll be partially unsatisfied.
Understand what success means
Understanding my objective, what success means to me and what gets in the way of my success is
key to developing products that deliver me value. Help me achieve better success by helping me
remove what gets in my way, and you’ll be delivering great value to me. Translate this into a set of
specifications and now you have a winning product.
To sum up: Customer success is what drives the value to the user thanks to the product benefits.
Methods such as the 3-Bricks Model © help you understand and structure what customers define as
success, how to package this into a product, and how to create a product roadmap. I’ll share more
about the 3-Bricks Model © in an upcoming article.
Customer success is at the core of profitable pricing
At its most fundamental level, pricing is about understanding the value delivered to customers. Once
this value has been understood, pricing helps measure it. It defines how much value you want to
capture (the price level), and how to capture it (the pricing model).
Pricing can be quite technical as it employs different approaches, pricing models, pricing metrics,
strategies, segmentation, and elasticity models. You need to be good at negotiating, but you also
need to understand the costs, margins, and revenue streams. The amount of data can quickly
become overwhelming.
Pricing is very analytical, but is also very strategic. What’s more, everybody in the organisation has
an opinion on pricing, but often, nobody really knows how to do it. The pricing person is usually
perceived as the one who prevents Sales from achieving great results. As someone responsible for
pricing, it can be very challenging to build and defend a pricing project internally. All these elements
create fog around what pricing is really about.
Pricing is fundamentally about 5 things only
To help lift the fog, here are five fundamental elements of pricing:
1° The first is about understanding the value an organisation creates for its customers and
translating this into a price. This value is linked to how much success you can help your customer
achieve.
2° The second is about measuring how much success you help your customer achieve. It means
finding the right KPIs that will lead to your pricing metrics and uncovering your customers’
willingness to pay.
3° The third relates to the way you will capture that value, i.e. the pricing model. The choice of
pricing model in itself carries value because of two main characteristics: the transfer of ownership
and associated risk, and your level of commitment to helping customers achieve their success.
4° The fourth is about defining the price level of your product: how much of the value you deliver to
your customers do you want to capture.
5° The fifth is about communicating the above four elements both internally and externally.
Communicate often and explain the why-how-what again and again. Soon, you’ll create adhesion to
your pricing.
Once you understand and apply these five fundamental elements of pricing to your organisation,
you will discover that pricing is much more than just figures and methods. It is a strategic and key
enabler of Sales and Marketing, and it touches upon all areas of your organisation. Pricing is
fascinating, and it can also be a lot of fun!
To sum up: Customer success is the key element that underlies the price and the pricing model.
Measuring, capturing, setting the exchange rate for the value created, and communication are all
fundamental pricing activities.
Methods such as the Reverse Innovation Development © help you understand the value delivered
and its benefits, and translate these into an optimal pricing strategy that ensures a high rate of
success for innovation. These methods also help you discard early on in the development process
any innovations that customers are not willing to pay for, so you don’t have to waste any time or
resources on zombie-innovations. We’ll look more deeply at the Reverse Innovation Development ©
method later on.
Customer success is at the core of positioning and a successful launch
You might have an excellent product with adequate pricing, but if your target customers do not
perceive you as the best to help them be more successful, you are unlikely to get strong sales. The
same product may have different benefits to different target customers. Articulating these benefits
is key to make sure users in each target segment know what your product can do for them, and how
it is unique versus other offerings. Implementing good positioning means that you need to
understand what success means to each customer segment (the value you bring), how your product
can help them achieve more success in a unique manner, and to what extent your product can help
them achieve this success better than your competitors. Also, it’s vital to know how to communicate to each segment.
Concretely a go-to-market plan is:
A go-to-market plan is a tactical plan that:
1° Aims to deliver unique value to customers to capitalise on the competitive advantage created by
your product for the target audience;
2° Outlines the steps necessary to succeed. There are steps taken towards the ‘outside’ of your
organisation, i.e. customers, resellers, distributors, partners, etc… There are also steps to take towards the ‘inside’ of your organisation to create alignment. Every department needs tounderstand the value that is created, their contribution to that value, and how and when they need
to act to deliver that value.
To sum up: Customer success is a key element to position your product distinctively on the market
and align all internal operations to actually deliver that promised value.
Methods such as the Customer Success for Distinctive Positioning and Successful Go-to-Market ©”
help you attract the right customers for the right reasons, while helping you align all those involved
to deliver the promised value. I’ll cover this method more deeply in another article.
Understanding and articulating customer success in product management, pricing, positioning and
go-to-market is the key to being successful in these areas, delivering value and driving customer
loyalty.
What is your experience with customer success?
What is your experience of using customer success to establish your game plan? Did you use it to
create and/or improve products? For pricing purposes? How about customer success with
positioning and go-to-market? I’d love to hear your stories!
Elithan Consultancy is a consultancy and interim management company that helps B2B technology
companies create, capture, position and launch customer value. Elithan Consultancy helps you make
informed and better decisions that lead to lower business risk and more positive outcomes.
